The Grift Machine: Episode I – Publicly Funded Sports Stadiums

Taxpayer Funded Sports Stadium Cartoon

by Troy M. Olson

The Rams franchise is heading back to their original city of Los Angeles, leaving the city of St. Louis behind and loyal fans crushed. All of this after the city of St. Louis promised to fund $150 million with more public funding to come from the state of Missouri.

It was a competitive offer and a large amount of the commentary since has been centered around how betrayed these fans feel (understandable) and how the National Football League and their team owners have behaved dishonorably in rejecting that deal to move the Rams to Los Angeles, one of the largest media markets in the country, who have been without an NFL franchise since the 1990’s.

What is lost in all of this is how this is actually the first time in a long while where the most amount of people in these stadium negotiations and deals have won out. Who are these winners? The public.

While it may not be consolation to dry the tears of Rams fans watching their 1999 playoff run on repeat this year, the city of St. Louis now has $150 million more they can allocate toward infrastructure, public safety, utilities, sewer maintenance, public projects, parks, and other areas that are “essential” features of what services are demanded and expected from the taxpaying public. Furthermore, the state of Missouri has millions more to spend on schools, health services, social services, roads, bridges and other infrastructure updates and projects. Those features are societal “needs.” Having an NFL franchise playing in your city, as nice as it is, is a societal “want.”Even that is being generous. Because like so many “grift machines” in American life today, a majority of people do not “want” this.

Simply put, owners have pitted the interests of sports fan’s love for their teams against the interest of the public. In nearly every case, the vocal minority of sports fans have got their way, political leaders could take credit, and the public loses. But the real winner every time is ownership and the league itself. Using threats to relocate the beloved franchise if demands for stadium financing are not met, owners have a stacked deck against both fans and the wider public. In any other factual scenario, especially one between two private actors, we would call this extortion. But since in these instances we have a public entity, either the municipality where the stadium is or would be located and the state potentially contributing funds – it would be fair to call this extortion and misuse of public funds.

It would be one thing if sports stadiums had a positive economic impact, but they don’t. In fact, public subsidies in the form of welfare checks to billionaire sports owners have a negative impact on both the area economy and the budget. Nine out of ten economists agree that public subsidies for sports stadiums is bad. Considering that economists have far less consensus building than scientists do, this agreement among academics and policy analysts is pretty strong.

This is just the latest in a long line of unfortunate episodes of taxpayer funded sports stadiums either in whole or part. Like so many other in American life today issues, it is tantamount to another round of welfare checks to billionaires that goes under-reported, unnoticed, and not acted on by leaders. What makes this issue particularly grating is that this theft of public dollars for private profit is seemingly bipartisan a lot of the time. Big city Democratic mayors and Democratic and Republican Governors have time and again, helped to broker deals to help billionaire sports owners finance new stadiums with public money.

Why? No intellectually honest or accurate assessment could stress the economic benefits, is the answer political? Support from the public? Once again, no.

Most polling for specific publicly funded stadium proposals have not been supported by the public. 69 percent were against public funding in one poll. The most friendly one I could find was in the city of Buffalo, perhaps the most hardcore and loyal football fanbase for an NFL team. The public was split 50/50 on the issue. There simply is no empirical evidence that the public supports taxpayer subsidized stadiums.

For decades the conversation has revolved around team ownership and the league interest, which has been placed ahead of the fans who have in turn been placed ahead of the public interest. For most other issues of heavily public subsidizing of big business, liberals and Democrats are up in arms over it. They have been silent, however, all too often over this issue. But it is the same principle at work. While many Democratic leaders have cowered in the face of billionaire owners threatening to move the team elsewhere, the leader of the party has finally called for some common sense on the issue. He would be right.

For the NFL specifically, the 16 stadiums that held opening games this year saw 3 billion dollars in public funding that will only enable the team ownership to increase the value of the franchise, raise ticket prices, alienate fans and hurt the integrity of the sport, and ultimately, end up with us all right back at the same place, asking for a new public subsidy in twenty years or so. It is time to end this “grift machine.” 

In curbing a world-class, well-oiled, “grift machine” – half-measures like referendums are not the way to go either, because it allows the entrenched interests an opportunity to use their deep pockets and influence the referendum, just like the Koch brothers and many other billionaires use their deep pockets to unduly influence the electoral process in the United States.

There ought to be an Act of Congress; the National Fan Protection and Professional Sports League Integrity Act. This act should lay out a framework to end the possibility of public funding for sports owners or ownership teams unless there is an opportunity for the team to truly become public. Because while teams are (except for the Green Bay Packers, the best franchise in professional sports, and I say this even as a Viking fan, because lets be honest, we’re all jealous of the Packers) privately-owned, they have many public features and become an integral part of many communities. The ownership should reflect this. Or at the very least, public money should not be subsidizing private profit.

Until this day comes, however, and I won’t hold my breath, political leaders (big city Mayors and Governors of both parties) owe it to the public that elected them to serve to say “no” to these taxpayer subsidized stadium boondoggles, even if special interests or a loud minority of sports fans lobby otherwise. It is not that complicated. All it takes is saying “no, pay for it yourself.” All it takes is a little political courage. A quality that is lacking in many political leaders and policy-makers today.

This has been the first in a series of articles on “Grift Machines” that will cover issues that are not necessarily at the top of the National Conversation, but exhibit many of the attributes of what is not working well for the public in terms of policy, economic impact, fairness, and efficient outcomes. 

 

 

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